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Council to revisit low-income housing project

Claire Kowalick, Times Record News
Published 3:32 p.m. CT June 16, 2017

Highpoint Village II apartments are one of three complexes under consideration for revitalization. Millennia Housing and Nortex are considering a partnership to use state and federal tax programs to revitalize low-income housing in Wichita Falls.(Photo: Contributed photo)

The Wichita Falls City Council will revisit an item Tuesday that has been tabled during several previous sessions.

Up for consideration are three resolutions voting “no objection” to proposed applications for housing tax credits from the Texas Department of Housing and Community Affairs for low-income housing renovation.

The proposals are for projects at Highpoint Village Apartments I and II and the Country Village Apartments, all on Professional Drive.

In April, the city received notice from Nortex Housing Finance Corp., teaming with Millennia Housing Development Ltd., that the pair wished to apply for non-competitive housing tax credits. The program allows companies to develop low-income housing with some relief from federal tax liability.

Millennia’s plan was to purchase and rehabilitate all three properties using Housing and Urban Development-insured loans, bonds and 4-percent tax credits through TDHCA. Teaming with Nortex, Millennia can receive tax-exempt housing finance bonds to aid the project. Nortex will be the owner of the properties and improvements and Millennia will enter a long-term lease as a secondary partner.

Construction and rehabilitation costs at Highpoint Village I and II are expected to be about $8.85 million with a total investment of about $23.88 million. The Wichita County Appraisal District lists the 2016 value of the Highpoint Village I property at $812,000 with local property taxes of $20,648.13. At Highpoint Village II, 2016 assessed value is $2,392,000 and local property taxes total $60,825.52.

The County Village Apartments have a 2016 value of $1,959,000.

Patience may pay off as Nortex, Millennia and city staff come to an agreement to make a reconstruction program a win-win all around.

Karen Montgomery-Gagne, Wichita Falls planning division, said all parties met with their attorneys over the past few weeks and agreed to terms as outlined in a draft agreement in the council agenda for Tuesday.

Nortex and Millennia will agree to make payments in lieu of taxes, or PILOT, equal to the taxes that are assessed on the current properties.

The agreement includes a 2-percent increase per year to account for potential increases in property values over the next 40 years.

The lease period was also changed from a 99-year lease to a 40 years.

If approved, the group’s first-year PILOT would be $36,450 in 2018.

With this agreement, Gagne said the city will not be losing out on funds going to the general revenue with the PILOTs making up for the loss in city taxes.

The non-competitive tax credit program is different than the competitive program, but applications still must meet strict requirements to earn the 4-percent tax credits.

“It’s still a very early step in the process. They do require municipal support by a vote of no objection to proceed,” Gagne said.

If approved, Millennia said there will be extensive renovation of the apartments exterior, interior and amenities including new security cameras, road ways and playground equipment. The work is expected to take 12-14 months with a completion time in early 2019.

In previous sessions, council members and city staff were leery of a commitment to the project because it would mean no local taxing entities would receive property tax revenue from the project once it was owned by Nortex and Millennia. The three complexes have a current value of $5.16 million.

Millennia group said they are offering investment of about $42.73 million into these three developments.